Social Security Planning: What Tony Robbins, Suze Orman, and 2 More Money Experts Have To Say
Written by
Seychelle Thomas
Edited by
Amber Barkley
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Even with investments, pensions or other funds making up your retirement income, Social Security is a significant part of the puzzle for many retirees. A 2024 report from the Center on Budget and Policy Priorities estimated that Social Security payments keep anywhere from 10 to 16.5 million adults over 65 out of poverty.
Even if you don’t plan to count on Social Security to keep food on the table, it still makes up the largest source of income for most low-income beneficiaries, according to the latest data from the Social Security Administration. So when you need to make sure you’re getting the most from your benefit payment, you’ll want to listen to the advice of these money experts.
Tony Robbins: Don’t Wait To Calculate
According to Tony Robbins, depending solely on Social Security to cover you in retirement is a disaster waiting to happen. On his blog, he offered some tough-love advice on retirement planning: “Time to get your head out of the sand and do some easy number crunching to find out where you are and where you need to be.”
And he’s right. If you don’t know what financial goal to aim for, you’ll have a difficult time reaching it.
Robbins also emphasized the importance of planning for a longer lifespan as you run those calculations. “Social Security was never intended to become a replacement for retirement savings, especially considering the extended length of retirement we can anticipate with longer lifespans. Fifty years ago, the average retirement was 12 years. Today it’s 20-plus years.”
That’s something Robbins aligns with another money expert on.
Ramit Sethi: Use the 4% Rule
To put Robbins’ advice to work and determine just how much you’ll need to save in addition to collecting Social Security, you may want to use Ramit Sethi’s suggestion of the 4% rule.
It’s a concept popularized by financial advisor Bill Bengen that helps you calculate how much you’ll need to have saved for retirement, assuming that you withdraw 4% of your portfolio each year after you retire. It’s a conservative rough estimate that accounts for increasing withdrawals due to inflation. However, it doesn’t account for things like your pension or Social Security benefits without a quick adjustment.
Here’s how it works — you calculate how much your average annual expenses will be in retirement based on your desired lifestyle. Then multiply that number by 25 or the total number of years you’ll be retired. For example, if you plan on retiring at 62 and have a life expectancy of 90 years old, you’ll need to multiply your annual expenses by 28.
If your annual expenses total out to $70,000, for instance, you’d want to have $1.75 million saved for retirement, assuming that you live for 25 more years after 65. From there, you could subtract the annual Social Security benefit you’re planning to receive by using the Consumer Financial Protection Bureau’s (CFPB) calculator to gather an estimate.
Suze Orman: Consider Delaying Payments
For early retirees, Suze Orman recommends waiting to collect benefits if you can help it. Even though you can start collecting Social Security once your 62nd birthday rolls around, you’d only receive 70% of your Social Security benefit. On her blog, Orman wrote, “If you are in your late 50s and in good health, you should seriously consider the upside of delaying when you start, so you can earn a higher benefit.”
Suze recommends holding out until age 67 if you were born in 1960 or later to get your full Social Security benefit. Of course, that decision depends heavily on your health and whether your finances can tolerate the added wait. If you’re in average health at 65, you might have a longer life expectancy, and the extra funds each month may help you cover expenses into your 80’s and beyond.
Dave Ramsey: Build Other Sources of Income
Dave Ramsey famously calls the Social Security system “Social Insecurity” due to the amount of strain it’s currently under. So the best way to ensure you’re financially supported in retirement is to have other sources of income to reduce your dependence on those monthly benefit payments.
The Social Security Administration reported that by 2035, Social Security is projected to reach a point of insolvency, when the funds contributing to the program are only enough to cover 80% of program costs.
Ramsey’s solution? Take matters into your own hands instead of depending on Uncle Sam. “The Social Security system is a mess — and you shouldn’t count on an inept government to fix it,” he wrote. He recommended investing 15% of your income in your 401(k) or a Roth IRA, specifically in growth stock mutual funds.
Bottom Line
Planning to claim Social Security and funding your retirement means managing a ton of moving pieces. But there’s something all of these money experts agree on — you can’t depend solely on collecting Social Security to live in retirement.
To maintain your current lifestyle or better, these four money experts suggest calculating how much you need, delaying Social Security payments and building out your other retirement income sources. You should also consider building in your life expectancy in your decision as to when to collect Social Security to maximize your monthly benefit payment.
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